Major Korean Banks Drop Bitcoin Point Swap Services

South Korean banks are further distancing themselves from bitcoin following the government’s ”emergency” regulation which bans them from direct involvement in cryptocurrency-related activities. Shinhan Bank and KB Kookmin Bank have announced that they are discontinuing their points for bitcoin exchange services in January.

Major Banks Move Away From Bitcoin

Two major Korean banks announced this week that they are discontinuing their “credit card points for bitcoin swap” services, Korea Biz Wire reported. Shinhan Bank will discontinue its service on January 15 and KB Kookmin Bank on January 22. The news outlet explained that currently:

KB Kookmin Card and Shinhan Card points can be redeemed for bitcoins at cryptocurrency exchange Coinplug, which has partnership agreements with both banks.

The two banks partnered with Coinplug to allow their credit card points to be redeemed for bitcoin.

Regulation Drives Korean Banks Out of Crypto Space

When the government announced its emergency measures for cryptocurrency regulation earlier this month, Choi Hong-sik, the governor of the Korean Financial Supervisory Service, was quoted by Yonhap saying:

We will prohibit financial institutions from directly entering or trading in virtual currency markets.

Ever since Choi “expressed the government’s intention to ban financial services firms from directly dealing or setting up shop in the cryptocurrency market, banks have one by one halted their cryptocurrency-related offerings,” Korea Biz Wire added.

Most major banks have already stopped issuing virtual bank accounts to cryptocurrency exchanges, as previously reported by news.Bitcoin.com. Virtual accounts are needed for trading cryptocurrencies in Korea.

In September, a service that allowed the purchase of cryptocurrencies using credit cards at the country’s leading bitcoin exchange Bithumb was shut down, two months after it launched. At the time the country’s financial authorities pointed out that “the service could be exploited by criminals using counterfeit credit cards,” the news outlet conveyed.

Do you think banks distancing themselves from cryptocurrencies will have a huge impact on the Korean crypto markets? Let us know in the comments section below.

A student of Austrian Economics, Kevin found Bitcoin in 2011 and has been an evangelist ever since. His interests lie in bitcoin security, open-source systems, network effects and the intersection between economics and cryptography.

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